Dlamini says she did not reject Gordhan's social grants option

Cape Town - Minister of Social Development Bathabile Dlamini on Friday refuted reports that she rejected Finance Minister Pravin Gordhan's option regarding the distribution of social grants after the Cash Paymaster Services (CPS) contracts end on March 31.

A media report this week cited a letter from Gordhan to Dlamini and eluded to a battle between the two.

On Friday, Dlamini said allegations that there is hostility between herself and Gordhan “are malicious and are intended to wedge a division between herself and the minister”.

This follows a statement on Wednesday by Treasury, which said it was dismayed by the suggestion that there was a “war looming” between Gordhan and Dlamini.

In another media report, Bloomberg quoted Gordhan in the letter to Dlamini, advising her that continuing the Net1 contract would be unlawful.

READ: Gordhan says extending Net 1 welfare deal is unlawful

The letter was part of Treasury’s advice, which Dlamini’s department sought, regarding the CPS contract.

“National Treasury explored and analysed the pros and cons of a range of payment options and provided expert inputs in areas of procurement, public finance, financial sector policy, banking and other related matters,” a spokesperson said.

In a statement on Friday, Dlamini said all correspondence between the two executives were part of the process of seeking solutions and therefore expressing views on the pros and cons to options presented to both principals by a joint committee that was established inclusive of National Treasury, the SA Reserve Bank and the Department of Social Development.

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“Therefore, the options are an outcome of a collective process and options are no longer viewed as individual options,” her department said in a statement. “There is therefore no Dlamini option or Gordhan option.”

The department said that the task team acknowledged that all options have pros and cons. “It is the responsibility of Minister Dlamini to decide which option will ensure that social grant beneficiaries receive their social grant on April 1, 2017 without interruptions,” it said.

READ: Don’t blame Treasury for welfare payment saga - DA

Dlamini is concerned about “potential legal landmines” that “could result in delays caused by vexatious litigation that may serve to rob the poor from access to their constitutional entitlements”.

“Given this, the minister is well aware of the fact that both the National Treasury and the South African Reserve Bank (SARB) as a regulator are key partners in safely transferring funds to millions of people every month,” the department said.

Dlamini “would not under any circumstances wish to see a weakened Minister of Finance and a weakened Treasury,” her department said.

“We know that this feeling is mutual and this was demonstrated by the collaboration of the two departments, Sassa and the SARB’S most senior officials on strategies to ensure that we are able pay grants on the April 1 2017 and beyond.”

Dlamini said the department and the South African Social Security Agency (Sassa) have developed an approach that includes approaching the Constitutional Court.  “No formal negotiations have started with (the) CPS,” it said. “It is also essential to mention that the inclusion of biometric verification is a prerequisite and any solution will have to include it.”

“Minister Dlamini wishes to assure all social grant beneficiaries that there will be no disruption to the payment of their grants and that their social grants will be paid on April 1, 2017,” it said.